Berkshire Hathaway Class A shares reached a new record on Monday, after Warren Buffett’s conglomerate announced its largest-ever quarterly profits. This was largely due to the strong performance of its insurance division.
Early afternoon, shares rose by as much as 4.5 percent to $7,52293.60.
Berkshire has now been valued at approximately $1.08 trillion. The company is now worth more than Elon Musk’s Tesla or semiconductor giant TSMC.
After the release of the results, several analysts increased their earnings and price target forecasts for the firm.
Forbes reports that Buffett’s net worth has also exceeded $155 billion.
Berkshire Hathaway earnings exceeded expectations
Berkshire’s operating business profit grew 71% in the fourth quarter, to $14.53 Billion, or $13.38 Billion if currency gains are excluded. This exceeded analyst expectations.
The operating profit for the entire year rose by 27%, to reach $47.44 Billion, another record. Berkshire’s cash and other equivalents of $334.2 Billion, which were largely held in US Treasury Bills, helped to boost the company’s results.
Berkshire’s cash reserves increased by twofold in 2024, as it reduced its Apple stake. Apple remained the company’s largest holding.
Buffett’s annual shareholder letter credited Geico CEO Todd Combs with improving the profitability of underwriting while reducing costs.
Geico’s underwriting profits more than doubled by 2024 despite the reduction of 2,300 jobs last year. This follows 7,700 cuts made in 2023.
Berkshire Hathaway’s massive cash pile grows
Berkshire Hathaway’s portfolio gains have slowed dramatically in the fourth-quarter, dropping to $5.2 billion compared with $29.1 in the previous period.
For the ninth quarter in a row, the company has sold more shares than it purchased. Total equity sales are expected to exceed $134 billion by 2024.
Buffett is aggressively cutting Berkshire’s stakes, which are its largest equity holdings Apple and Bank of America.
Berkshire has increased its cash reserves to a record of $334.2 Billion, up from the $325.2 Billion at the end the third quarter.
Buffett’s annual letter addressed the concerns of investors about the cash record, stating that this does not indicate a decreased appetite for businesses and stocks.
The majority of the money you have invested in Berkshire remains in stocks, and that will not change.
Buffett said that he was often unable to make new investments because of high prices, “mostly, nothing seems compelling.”
Greg Abel was also his choice for successor. He compared his investment abilities to those of Charlie Munger, who died in 2003.
Wall Street analysts discuss Berkshire Hathaway
Shields and Meredith from UBS raised their price target on Berkshire Hathaway Class A shares following its Q4 2024 results report.
Brian Meredith reinforced his Buy rating for the stock, and raised his price target from $803 445 to $836 135
Meyer Shields increased his goal to $775,000. He still maintains the Market Perform rating.
Keefe, Bruyette & Woods analyst Keefe, Bruyette & Woods expressed optimism regarding Berkshire Hathaway stock performance after its EPS was beaten and GEICO had strong core underwriting result.
Following the latest earnings report from Berkshire Hathaway, KBW raised their 2025 EPS estimates for Berkshire Hathaway up to $31,600, an increase of $30,140.
The firm’s projected 2026 earnings per share (EPS) has been reduced to $32,660, down from $32,720. This is due to higher insurance revenue but lower income other than that of non-insurance in future years.
This article Berkshire Hathaway stocks hit record highs after strong earnings first appeared on The ICD
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